A former Deputy Governor of the Central Bank of Nigeria (CBN), Prof. Kingsley Moghalu yesterday warned that current efforts by the National Assembly to pass a bill removing the apex bank Governor as its Chairman, Board of Directors and remove the powers of the board to fix the bank's budget was "completely wrongheaded and should be dropped."
He said such amendment to the CBN Act of 2007, which also seeks to set the salaries of its staff would finally destroy the apex banking industry regulatory institution by dis-robing it completely of its institutional independence as enshrined in the Act.
Moghalu added that the development if allowed would make the CBN a, "statutory corporation under the law, to become a ministry or a mere agency or department of the government," stressing that it would also, "render the bank an open playground for politicians who are the custodians of our dysfunctional governance."
In a statement made available to THISDAY, he contended that there were good reasons why the Governor of the Bank is the Chairman of its Board of Directors.
He said, "This is the case in most central banks around the world. This framework protects central banks from external interference. A central bank's policies and its internal administration should objectively advance the interest of the national economy, not the partisan agendas of political parties or individuals."
Moghalu also said that it was part of the required independence that the CBN creates its own budget and sets its staff pay, adding that it was no accident that the central bank, "is arguably the top repository of public sector talent in the country."
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He said, "This is because of massive investments by the bank in staff development, coupled with high standards of recruitment."
The former deputy governor of the bank further stressed that though the CBN should be accountable, "but let's not throw the baby away with the bath water."
He said, "The CBN Act already requires the bank to periodically brief the National Assembly on its operations. The President of Nigeria approves and signs the bank's annual reports and in addition is empowered to approve any change to the legal tender and any investment by the Bank outside Nigeria.
"What needs to be done is to make these accountabilities effective, not to gut one of the most unique and important institutions in any country, and the unique nature of which requires its independence in order to work effectively for the government and the citizens."
